So, here we are once again near the new highs. When the year started, it seemed for certain we might never get here. After all, the Santa Claus Rally turned into a major flop, and then January was an awful month and possibly portrayed a dismal year to come.
But, like 2014, the month of February has been kind to the bulls (so far), and with the indices now up about 2% for the year, we are seeing some very solid action – broadening leadership among the groups that should lead the market higher.
But what’s interesting is the level of worry that continues to hamper this market. I’m not complaining, the best runs in the market are filled with doubt; it’s when the crowd decides to go “all in” or fully loaded is where I get worried. Color me averse to having company.
The wall of worry, a psychological market phenomenon that works like an invisible barrier is up high. What is it? Basically, there are worries stacked up high that preclude investors from jumping into the markets.
Where do we start? Of course, there is the uncertainty over Greece and the EU, the Russia/Ukraine conflict, terrorist issues, lower crude oil due to excess supplies, and then we have global growth issues and potential deflation – not to mention unknowns about US Fed policy.
I’m sure there is more, and perhaps more to come. The worry is the uncertainty over events that might trigger surprise selling – and who wants to be invested when that happens, especially if it’s swift? But, while many are fearful of investing or trading, the market trudges higher – always willing to make everyone look bad, zig when it’s supposed to zag.
So, we’ll have to see if players start coming to the party, and, as usual, at the wrong time. There is always some hesitancy, but currently the market sentiment is full of worry, which means the markets may continue to surprise everyone by rising even higher.
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